Friday, January 27, 2017

The Owner Lives Upstairs

I don’t know about you but I loved the neighborhood where I grew up. It was a pretty typical Chicago working class neighborhood. The city planners in Chicago designed a grid system that consisted of residential streets filled with apartment buildings and homes, bisected every four blocks by a major street that served as the neighborhood’s commercial district and public transportation artery. At most it was a three or four block walk to the store, be it the pharmacy, butcher, baker, barber, beauty salon,dry cleaner, toy store, clothing store, shoe store, dentist, furniture store, bank, grocery store, neighborhood department store, or deli. They were all within walking distance. All that walking kept us a little thinner than we are today.
Most of the businesses in those days were family owned and operated. The majority of the buildings on those commercial streets were two story structures with businesses housed on the ground floor and apartments above. Many of the business owners lived right above their stores. They had a short commute to work and always had their eye on their businesses and the neighborhood goings on. Everybody knew each other. There was a strong sense of community and an ingrained sense of accountability and responsibility to each other.

Before the word “diversity” was even a thing we had a great deal of it in my neighborhood. There was a mix of religions, a couple different races, and the kids with “handicaps” of one type or another just played with the other kids, usually in the alleys, to the best of their abilities. We really never really thought about our differences, we were just the kids in the neighborhood and the most prominent form of discrimination occurred when we chose up sides for sports. Can’t kick? Can’t block? Can’t “place hit” over the second baseman’s head? You got chosen last. Didn’t matter your race, religion, economic status, or political leanings.

It was a time when sprawling regional malls filled with shops owned by giant corporations from far flung parts of the country were still a thing of the future. Ironically, today those malls are rapidly becoming a relic of the past. But that’s a different subject.

So what made me think about all of this? It’s the inauguration of a new president, the changing of the guard in DC and around the nation. It occurred to me that the president is similar to the owners of the small businesses in my old neighborhood. He lives upstairs, above his business, has a short commute to work, and is responsible for knowing his customers and keeping the neighborhood safe, clean, and respectable. He can’t operate in a vacuum but needs to work in cooperation with the neighborhood’s other business owners (members of Congress and heads of state). He needs to respect and even love his customers, treat all of them with dignity and fairness and if he doesn’t he’ll find himself out of business, or out of office, before he knows what happened.

It is my hope that we experience a peaceful transition of power from the old to the new. I hope too that the new guy who lives above the store in DC accepts the mantle of power and responsibility with a deep sense of humility and accountability to the people in the neighborhood. I’m deeply concerned about the fact that Washington, DC has become the nation’s seat of wealth and “bought and paid for” power and is no longer the epicenter of service to the people. In a perfect world the president’s duty is to make all things possible for all of the people in the nation. Then, government needs to get out of the way and let true democracy and a fairly regulated market economy do the rest.

From my own perspective I believe that the initiative taken by our former president to expand health insurance coverage to the uninsured population was well intended but poorly executed. We’ve got a new option to do it right. The worst thing that we can do is go back to pre-2014 health care. The best that we can do is rein in health care and prescription costs so that our costs are aligned with the rest of the industrialized world. The problem isn’t insurance, the real problem is our system’s open wallet to health care providers and pharmaceutical manufacturers. If we can fix that then the insurance problems will take care of themselves. I hope the guy on the second floor is listening.

Thanks for reading. 

Alan Leafman, President
(800) 955-0418

Friday, January 20, 2017

Misleading Life Insurance Ads

 I suppose that I’m more sensitive to this than the average person because I’m in the life insurance business but the commercials and ads touting huge amounts of life insurance for “only $10 a month” really tick me off.

The more media channels there are the more advertising messages we are exposed to. Although many of today’s market researchers have come to accept as common knowledge that the average person in the US is exposed to 5,000 ads and brand messages (could be a label in your pantry, a commercial, a billboard, a text, or an image on a website) per day other research has shown that in a typical day the average person is exposed to about 265 actual ads.       

This presents a huge challenge to all sellers of products and services. In the life insurance industry it also causes problems for well-meaning consumers who are in the market for life insurance. Why? With all of the advertisers clamoring for eyeballs and eardrums life insurance companies are always looking for ways to stand out from the crowd. Being the largely uncreative industry that it is, the typical life insurance company leads with low-price messages. The problem for consumers is that most life insurance companies have as many as 14 different “real” rates for the same policy!

Here’s the way it works:

Life insurance company A, let’s call them Lotsa Money Mutual, offers a $250,000 policy with rates that are locked in for twenty years. They advertise their policy for only $22 per month for a 42-year old male. You bite on the ad, dial the number, decide to apply and six weeks later a policy gets issued…except the rate is $51 per month. Why? Because maybe you’re a little heavy, maybe your father had a coronary before he was 60 years old, maybe you take a medication for gout, maybe you had a couple of traffic tickets. I could go on with “maybe’s” for a few more paragraphs.

What Lotsa Money Mutual never advertises is that they issue policies with 14 different rates and their advertised rates are actually issued to only 7 out of every 100 applicants. But by the time that you’ve gone through the application process and waited six weeks for a policy you’re too worn down to try it again with another insurance company so you just bite the bullet and pay the higher rate. In fact, the insurance companies are counting on you not having the fortitude to start over again with a new insurance company.

Here is an example of a typical life insurance company’s rate categories:
Ultra non-tobacco Preferred non-tobacco
Standard plus non-tobacco Standard Non-tobacco
Preferred tobacco Standard tobacco
Table 1 Table 2
Table 3 Table 4
Table 5 Table 6
Table 7 Table 8

That’s fourteen different rates for the same policy for the same age. Times two because there’s a different table for men and women! That’s right…as many as twenty-eight different rates for a single age. To determine your actual rate the insurance company uses many different factors such as your height and weight, current and past medications, tobacco use, medical history, driving record, family history, income, and many more.

So here’s another shameless commercial. If you are in need of life insurance don’t fall for those teaser ads. Use the services of an independent, professional broker (like us) who represents many insurance companies and, more importantly, who takes the time to write up a detailed personal profile for you so that you get the most accurate quotes possible. That’s really the best way to be assured of getting the best rate for you, not for the guy on the commercial who is 6’ 3” tall, 165 pounds, runs marathons, and doesn’t drink, think impure thoughts, and whose family lived into their hundreds.

Of course, like all of our services, we don’t charge a penny for analyzing the best possible rates from the highest rated insurance companies. We’ll always work hard to earn your trust and to earn your business.

Thanks for reading.

Alan Leafman, President
(800) 955-0418

Friday, January 13, 2017

Remorse over your 2017 Obamacare selection?

We just finished year four of Obamacare for individuals and families and it wasn’t pretty. The government now has a heavier hand than ever in your health care and the insurance companies are running for the hills to get out of the individual health insurance business.

In tens of thousands of cases the government actually chose a health insurance plan for those whose 2016 coverage was cancelled. Without any warning people received bills and threatening phone calls from their new insurance companies, demanding payment and not providing a single detail about the insurance plan that the government chose for them. Among our own clients we found that 100% of the bills for these new plans were wrong.

In many states there were only one or two insurance companies available, some with rates that were double or more than those in 2016, and most with plans that have very small provider networks. Maximum out-of-pocket costs for 2017 were also increased to $7,150 per person. These changes have caused unspeakable disruptions in care for those who are in the middle of treatment for medical issues. The only bright note is that for some, premium subsidies have increased, bringing monthly costs of coverage to levels that are lower than 2016. That’s little consolation for those who are being treated for cancer, diabetes, heart disease, or other complex medical conditions who are now forced to find new specialists and primary care physicians. We have clients who are awaiting results from tests taken in 2016 who must now find new doctors to interpret their tests or pay entirely out-of-pocket for doctors who were in network last year and out of network in 2017.

Why has all of this happened? It’s really simple math if you’re an insurance company. You have paid out millions more in claims than you collected in premiums. No business can sustain itself with long-term losses. The “Affordable” Care Act simply included far too many unrestricted benefits to be sustainable. The problem was compounded by the fact that not enough young people enrolled and too many older folks entered the system, received care, and then dropped their insurance plans.

If you are unhappy with your 2017 Obamacare plan don’t wait another year…there may be better options right now.

Now that the dust of Open Enrollment 2017 has started to settle I want you to know that you are not necessarily stuck with an unsatisfactory plan for another year. Several options are available right now:

  • Short term health insurance plans that can cover you for up to 11 months
Not for everyone, but this could be an excellent low-cost (as little as half the cost of Obamacare) option for those in good health. Be aware, these plans do not cover the “3 P’s”….pre-existing conditions, preventive care, and pregnancy. They also do not meet the government’s requirements for the Affordable Care Act which means that you will pay a fine for not having compliant coverage. Still, your net costs could be thousands less than plans offered through the Marketplace…even after the fines.
CAUTION: As of April 1st the longest that a new policy may run is 3 months (unless the new administration changes the law). So, if this option interests you be sure to apply by March 31st.
  • Join a medical cost sharing ministry
This is a great option for many of our clients. These plans, which operate similarly to co-ops, are exempt from the Affordable Care Act’s requirement to have insurance from a health insurance company…translation: No fines
As long as your ministry was established by the year 2000 you will have an exemption from Obamacare on your taxes. Also, these plans offer very affordable rates (called contributions) and networks that are far larger and less restrictive than those through the Marketplace. There are also no Open Enrollment periods for these plans. You may enroll at any time of the year. We have all the details on this option.
  • If you own a small business all you need is one employee in addition to yourself in order to have a group plan
The group health insurance market in most states is far larger than the individual health insurance market. This is true for both the number of insurance companies offering coverage and the types of plans and networks that are offered. All it takes is one enrolled full-time employee, not a spouse, plus you and you’ve got a group. No enrollment deadlines for this option either. Start your plan any time of year.
  • Choose a different Obamacare plan
If the government enrolled you in a plan that you did not choose, or if you chose a plan that you are unhappy with, you may select a different Obamacare plan until January 31, 2017.
Your new plan will begin on March 1st.
  • A new administration in Washington could enact health care legislation at any time…stay tuned

Please let us know if you have questions about any of the options described above. We are happy to provide you with all of the information that you need in order to evaluate your options and make an informed decision about your health care…sooner rather than later.

Thanks for reading.

Alan Leafman, President
847-559-9699 x 222
480-654-1200 x 222

Friday, January 6, 2017

“Careers Careers the Finest Game in Years”

“Careers, Careers, the Finest Game in Years”

There used to be a very popular board game called “Careers”. The line above was their advertising slogan. When it was first released by Parker Brothers in 1955 the choices of career paths included:


I’m not sure what they had in mind with “Uranium” and “Moon” as careers but they were very topical subjects in the 50’s. Later versions of the game introduced career paths just for girls such as teacher, fashion designer, and Super mom. Times have certainly changed. In the real world there are more career paths than ever before and, just as in other times in our history, old occupations become obsolete and new ones take their place. With few exceptions occupation-related gender stereotypes are a thing of the past.

One very stable industry for lifelong careers is the insurance and risk management industry. After all, it’s been around for about 400 years and, in fundamental ways, remains unchanged. Today more than 2.5 million Americans earn their livings in the insurance industry. However, unlike many other occupations, insurance does not rank high on young people’s list of desirable occupations. In fact a recent survey by Signet Research, Inc. found that 43% of those in the insurance sector got there because they had relatives and friends in the industry while another 32% said they “stumbled into it”. Most of the agents and brokers that I have met in my thirty years in the industry also stumbled into it after working in a different occupation. I suppose as an industry we need to do better at getting on young peoples’ radar screens.

Now I’m the first to admit that a career in the insurance industry isn’t “top of mind” for most young people. If it’s on the list at all it’s way down there. However a recent survey of independent agents under age 40 revealed that 81.6% of them would recommend a career in insurance to another young person. I doubt that there are too many other industries with such high satisfaction rates. Openings? In property and casualty insurance alone there will be 400,000 available positions within the next four years.

There are a great variety of paths that can be followed in the industry including actuaries, underwriters, technical disciplines of all types, marketing, claims, service, and sales. The industry also employs many medical professionals who perform various underwriting, risk management, and disease management functions. Most insurance positions provide complete compensation and benefit packages with long-term opportunity for upward mobility and retirement benefits. Not very sexy, but very solid.

The best undergraduate programs in the country offer anywhere from seven to fifteen different courses that lead to undergraduate degrees. The top twenty undergraduate programs have about 3,000 majors enrolled each year. The top ten graduate programs send about 850 advanced degree graduates into the workforce each year. The two major paths that are followed in the insurance industry are property and casualty (insuring things) and life and health (insuring people). Regardless of the path you choose, if you like and can relate to people you won’t find many other industries that provide the opportunity to build relationships and friendships that can last for decades.

So, if you are a young person reading this message, looking for career possibilities, please add insurance to your list. If you know a young person who, like so many today, are under-employed or unfulfilled in their current career let them know that a career in insurance could be just what they’re looking for. We’re going to need thousands of new employees for years to come.

Thanks for reading.

Alan Leafman, President
847-559-9699 x 222
480-654-1200 x 222